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Basile v. Stream Energy Pennsylvania, LLC

United States District Court, M.D. Pennsylvania

May 31, 2018

STEVEN BASILE, on behalf of himself and all others similarly situated, Plaintiff


          Kane Judge

         Before the Court is Plaintiff's Unopposed Motion for Preliminary Approval of Class Action Settlement. (Doc. No. 80.) For the reasons that follow, the Court will grant the motion and schedule a fairness hearing.

         I. BACKGROUND

         On June 9, 2015, Plaintiff Steven Basile filed a putative class action complaint, on behalf of himself and all others similarly situated, in the United States District Court for the Eastern District of Pennsylvania[1] against Defendants Stream Energy Pennsylvania, LLC, Stream Energy Pennsylvania, LLC d/b/a Stream Energy, and Stream Energy d/b/a Stream Energy Pennsylvania LLC (“Defendants”), alleging that his deregulated electricity provider did not abide by the terms of his service contract, resulting in higher-than-expected rates. (Doc. No. 1.) Plaintiff's complaint asserted claims for breach of contract (Count 1), breach of the covenant of good faith and fair dealing (Count 2), declaratory relief (Count 3), and a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”) (Count 4). (Id.) After Defendants filed a motion to dismiss Counts 2 through 4, Plaintiff stipulated to the dismissal of Counts 2 and 3, leaving only a claim for breach of contract and a violation of Pennsylvania's UTPCPL. On September 6, 2016, this Court, by Memorandum and Order, granted Defendants' motion to dismiss Plaintiff's UTPCPL claim, leaving only Plaintiff's breach of contract claim pending. (Doc. Nos. 56, 57.)

         Thereafter, the parties proposed deadlines governing class certification, expert reports, and dispositive motions (Doc. No. 60), which were approved and subsequently extended by the Court at the request of the parties by Orders dated November 9, 2016 (Doc. No. 61), June 17, 2017 (Doc. No. 67), and July 14, 2017 (Doc. No. 69). On October 23, 2017, after the parties had engaged in discovery for a number of months, Plaintiff's counsel submitted a letter to the Court indicating that the parties had reached an agreement in principle to settle the case, and requesting the Court's approval of a joint stipulation to stay case deadlines until November 30, 2017 (Doc. No. 74), which the Court granted (Doc. No. 75). After filing a second stipulation seeking additional time to finalize the proposed Settlement Agreement (Doc. No. 76), which the Court approved (Doc. No. 77), Plaintiff filed the pending Unopposed Motion for Preliminary Approval of Class Action Settlement on December 28, 2017 (Doc. No. 80).

         The Motion requests an Order: (1) preliminarily approving the proposed Settlement Agreement for the purposes of allowing dissemination of notice of the settlement to the proposed Settlement Class; (2) establishing a date for a hearing on final approval of the proposed settlement; (3) approving the form of class notice; (4) approving the notice plan and directing that notice be made available and published; (5) establishing a deadline for filing papers in support of final approval of the proposed Settlement Agreement, as well as the filing of objections by Settlement Class members; (6) establishing a deadline for Settlement Class members to exclude themselves from the proposed Settlement Class; and (7) appointing Jonathan Shub, Esq. of the firm Kohn Swift & Graf, P.C. and Troy M. Frederick, Esq. of the firm Marcus and Mack, P.C., as Class Counsel for the Settlement Class. (Doc. No. 80.) In support of his Motion, Plaintiff submitted a supporting brief (Doc. No. 81), and the following: (1) the Proposed Settlement Agreement (Doc. No. 81-1); a Draft Long Form Notice of Proposed Class Action Settlement (“Settlement Notice”) (Doc. No. 81-2); a Draft Publication Notice of Proposed Class Action Settlement (“Publication Notice”) (Doc. No. 81-3); a Proposed Order granting preliminary approval of Proposed Class Action Settlement (Doc. No. 81-4); a Proposed Order granting final approval of Class Action Settlement (Doc. No. 81-5); a Claim Form (Doc. No. 81-6); the Declaration of Steven Weisbrot, Esq., partner with Angeion Group, LLC (“Angeion”), a class action notice and settlement administration firm (Doc. No. 81-7); the Declaration of Jonathan Shub, Esq. (Doc. No. 81-8); and descriptions of the two law firms sought to be appointed Class Counsel (Doc. Nos. 81-9 and 81-10).


         A. Class Action Settlement

         Federal Rule of Civil Procedure 23(e) governs the settlement of class actions and the procedures that apply for review of a class action settlement. Fed.R.Civ.P. 23(e); In re Nat. Football League Players Concussion Injury Litig., 775 F.3d 570, 581 (3d Cir. 2014). The following procedures apply to a proposed settlement:

(1) The court must direct notice in a reasonable manner to all class members who would be bound by the proposal.
(2) If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate.
(3) The parties seeking approval must file a statement identifying any agreement made in connection with the proposal.
(4) If the class action was previously certified under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so.
(5) Any class member may object to the proposal if it requires court approval under this subdivision (e); the objection may be withdrawn only with the court's approval.

Fed. R. Civ. P. 23(e).

         A court's decision to preliminarily approve a proposed class action settlement is not a commitment to approve the final settlement, but instead “is a determination that ‘there are no obvious deficiencies and the settlement falls within the range of reason.'” Gates v. Rohm and Haas Co., et al., 248 F.R.D. 434, 438 (E.D. Pa. 2008) (quoting Smith v. Prof. Billing & Mgmt. Servs., Inc., No. 06-4453, 2007 WL 4191749, at *1 (D.N.J. Nov. 21, 2007) (citations omitted)). Preliminary approval of a proposed class action settlement “establishes an initial presumption of fairness, ” In re Gen. Motors Corp., 55 F.3d 768, 785 (3d Cir. 1995) (citing Newberg on Class Actions § 11.41 (3rd ed.)), and guides “whether notice of the proposed settlement should be sent to the class.” Newberg on Class Actions § 13:13 (5th ed.). In reviewing a proposed class action settlement, district courts examine whether the proposed agreement arose out of “serious, informed non-collusive negotiations, ” has any “obvious deficiencies, ” “improperly grant[s] preferential treatment to class representatives or segments of the class, ” and “falls within the range of possible approval.” In re Nasdaq Market-Makers Antitrust Litig., 176 F.R.D. 99, 102 (S.D.N.Y. 1997) (citing Manual for Complex Litigation § 30.41 (3rd ed.)); see In re Gen. Motors Corp., 55 F.3d at 785.

         B. Conditional Certification of Settlement Class

         Further, if “the Court has not already certified a class, the Court must also determine whether the proposed settlement class satisfies the requirements of Rule 23.” Gates, 248 F.R.D. at 439 (citing Anchem v. Windsor, 521 U.S. 591 (1997)). In making this preliminary determination, district courts examine whether “the proposed class satisfies the criteria set out in Rule 23(a) and at least one of the subsections of Rule 23(b).” Manual for Complex Litigation § 21.632 (4th ed.)). The court may conditionally ...

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